Volterra Reports Second Quarter Financial Results

Volterra Reports Second Quarter Financial Results

FREMONT, Calif., July 22, 2013 (GLOBE NEWSWIRE) -- Volterra Semiconductor
Corporation (Nasdaq:VLTR), a leading provider of high-performance analog and
mixed-signal power management semiconductors, today reported financial results
for its second quarter ended June 30, 2013.

Net revenue for the second quarter of 2013 was $34.4 million, a 21% decrease
from $43.6 million in the second quarter of 2012, and a 14% decrease from
$39.9 million in the first quarter of 2013. GAAP net income was $0.7 million,
or $0.03 per share (diluted), an 88% decrease from $6.0 million, or $0.22 per
share (diluted) in the second quarter of 2012, and a 76% decrease from $3.0
million, or $0.12 per share (diluted), in the first quarter of 2013.

Volterra also reported net income and basic and diluted net income per share
on a non-GAAP basis. Non-GAAP net income excludes the effect of stock-based
compensation expense. Non-GAAP net income was $3.2 million, or $0.13 per share
(diluted), in the second quarter of 2013, a 62% decrease from $8.5 million, or
$0.32 per share (diluted), in the second quarter of 2012, and a 44% decrease
from $5.8 million, or $0.22 per share (diluted), in the first quarter of 2013.

"Revenue came in at the low end of guidance as our notebook business declined
as expected and we experienced a one quarter inventory correction with a
server customer," said Volterra President and CEO Jeff Staszak. "Q3 orders are
stronger at this point than this time last quarter and we are therefore
encouraged about our short term outlook and longer term growth opportunities
in our server storage, communications and energy businesses."

Earnings Conference Call

Volterra will be conducting a conference call today at 2:00 p.m. (PDT). To
access the conference call, investors can dial (877) 941-8609 approximately
ten minutes prior to the initiation of the teleconference. International and
local participants can dial (480) 629-9692. Investors should reference
Volterra. A digital replay of the conference call will be available until
midnight on Monday, July 29, 2013. To access the replay, investors should dial
(800) 406-7325 or (303) 590-3030 and enter access code 4627837. A webcast of
the conference call also will be available from the Investors section of the
Company's website at: http://www.volterra.com until midnight on Monday, Aug.
19, 2013.

About Volterra Semiconductor Corporation

Volterra Semiconductor Corporation, headquartered in Fremont, CA, designs,
develops, and markets leading edge silicon solutions for low-voltage power
delivery. The Company's product portfolio is focused on advanced switching
regulators for the computer, datacom, storage, and portable markets. Volterra
operates as a fabless semiconductor company utilizing world-class foundries
for silicon supply. The Company is focused on creating products with high
intellectual property content that match specific customer needs. For more
information, please visit http://www.volterra.com.

Non-GAAP Financial Measures

Volterra provides all information required in accordance with generally
accepted accounting principles (GAAP), but it believes that evaluating its
financial results may be difficult if limited to reviewing only GAAP financial
measures. Volterra's management believes the non-GAAP information provided is
useful to investors and other users of its financial information and its
inclusion with our financial results is warranted for several reasons:

  *it can enhance the understanding of Volterra's financial performance by
    adjusting for special, non-recurring items that may obscure results and
    trends in our core operating performance, particularly in reconciling
    differences between reported income and actual cash flows;
    
  *it can provide consistency in reviewing Volterra's historical performance
    between periods, as well as allowing for better comparisons of Volterra's
    performance with similar companies in Volterra's industry;
    
  *it allows users to evaluate the results of the business using the same
    financial measures that management uses to evaluate and manage Volterra's
    internal planning, budgeting and operations; and
    
  *it provides investors with additional information used by management, its
    board of directors and committees thereof, to determine management
    compensation.

Volterra's management reports and uses calculations of (i) non-GAAP gross
margin and non-GAAP gross margin as a percent of revenue, which represents
gross margin excluding the effect of stock-based compensation; (ii) non-GAAP
income from operations (and its components, non-GAAP research and development
expense, non-GAAP selling, general, and administrative expense, non-GAAP total
operating expenses, and including non-GAAP gross margin as indicated above) as
well as non-GAAP operating margin as a percent of revenue which represent
income from operations and its components excluding the effect of stock-based
compensation and special items such as restructuring charges; and (iii)
non-GAAP net income (and its components listed above), non-GAAP net margin as
a percent of revenue, and non-GAAP diluted net income per share, which
represents net income and diluted net income per share excluding the effect of
stock-based compensation expense and special items such as restructuring
charges.

Investors should note that the non-GAAP financial measures used by Volterra
may not be the same non-GAAP financial measures, and may not be calculated in
the same manner, as that of other companies. Whenever Volterra discloses such
a non-GAAP financial measure, it provides a reconciliation of non-GAAP
financial measures to what it believes to be the most closely applicable GAAP
financial measure. A reconciliation of GAAP net income to non-GAAP net income
is included in the financial statements portion of this release and at the
Investors section of our website at www.volterra.com. Investors are encouraged
to review the related GAAP financial measures and the reconciliation of these
non-GAAP financial measures to their most directly comparable GAAP financial
measure. Volterra does not provide a non-GAAP reconciliation for non-GAAP
estimates on a forward-looking basis, as it believes it is unable to provide a
meaningful or accurate calculation or estimation of stock based compensation
or other special items without unreasonable effort.

Volterra is a trademark of Volterra Semiconductor Corporation and is
registered in certain jurisdictions. All other names mentioned are the
property of their respective owners and are mentioned for identification
purposes only.

Forward-Looking Statements:

This press release regarding financial results for the quarter ended June 30,
2013 contains forward-looking statements based on current expectations of
Volterra. The words "expect," "will," "should," "would," "anticipate,"
"project," "outlook," "believe," "intend," and similar phrases as they relate
to future events are intended to identify such forward-looking statements.
These forward-looking statements reflect the current views and assumptions of
Volterra but are subject to various risks and uncertainties that could cause
actual results to differ materially from expectations. Among the factors that
could cause actual results to differ materially from those in the
forward-looking statements are the following: risks related to our ability to
maintain revenue growth or other financial results; risks related to our
dependence on a limited number of customers; risks related to the limited
markets we operate in and the limited number of products we sell; risks
related to the quality of our products or the management of our inventory;
risks related to our relationship with our vendors and contractors;
intellectual property litigation risk; and other factors detailed in our
filings with the Securities and Exchange Commission, including the annual
report on Form 10-K filed on March 6, 2013 and the quarterly report on Form
10-Q filed on May 6, 2013. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in their entirety
by this cautionary statement, and Volterra undertakes no obligation to revise
or update any forward-looking statements to reflect events or circumstances
after the date hereof, except as required by law.

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
                                                                 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
                                                                 
                                      Three Months Ended  Six Months Ended
                                      June 30,            June 30,
                                      2013      2012      2013      2012
                                                                 
Net revenue                            $ 34,396 $ 43,574 $ 74,315 $ 85,636
Cost of revenue *                      14,403   18,292   31,626   36,188
                                                                 
Gross margin                           19,993   25,282   42,689   49,448
                                                                 
Operating expenses:                                               
Research and development *             10,878   10,995   22,392   21,393
Selling, general and administrative *  7,101    6,805    14,307   13,714
Litigation                             1,019    1,279    1,816    1,979
                                                                 
Total operating expenses               18,998   19,079   38,515   37,086
                                                                 
Income from operations                 995      6,203    4,174    12,362
Non-operating expense (benefit), net   50       58       98       (30)
                                                                 
Income before income taxes             945      6,145    4,076    12,392
Income tax expense                     205      131      300      188
                                                                 
Net income                             $740    $6,014  $3,776  $ 12,204
                                                                 
Net income per share:                                             
Basic                                  $0.03   $0.24   $0.15   $0.48
                                                                 
Diluted                                $0.03   $0.22   $0.15   $0.45
                                                                 
Weighted average shares outstanding:                              
Basic                                  25,055   25,412   25,109   25,267
                                                                 
Diluted                                25,488   26,922   25,637   26,837
                                                                 
                                                                 
* Includes stock-based compensation                               
expense as follows:
Cost of revenue                        $157    $193    $338    $422
Research and development               1,208    1,023    2,323    1,993
Selling, general, and administrative   1,131    1,266    2,594    2,461
                                                                 
Total stock-based compensation expense $2,496  $2,482  $5,255  $4,876




VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
                                                        
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
                                                        
                                   Three Months Ended June 30, 2013
                                            Effect of    
                                            Stock-based 
                                   GAAP      Compensation Non-GAAP
                                                        
Gross margin                        $19,993 $(157)     $20,150
Gross margin %                      58.1%     -0.5%        58.6%
                                                        
Operating expenses:                                      
Research and development            $10,878 $1,208     $9,670
Selling, general and administrative 7,101    1,131       5,970
Litigation                          1,019    --         1,019
                                                        
Total operating expenses            $18,998 $2,339     $16,659
                                                        
Income from operations              $995    $(2,496)   $3,491
Operating margin %                  2.9%      -7.2%        10.1%
                                                        
Net income                          $740    $(2,496)   $3,236
Diluted net income per share        $0.03   $(0.10)    $0.13
                                                        
                                                        
                                   Three Months Ended June 30, 2012
                                            Effect of    
                                            Stock-based 
                                   GAAP      Compensation Non-GAAP
                                                        
Gross margin                        $25,282 $(193)     $25,475
Gross margin %                      58.0%     -0.5%        58.5%
                                                        
Operating expenses:                                      
Research and development            $10,995 $1,023     $9,972
Selling, general and administrative 6,805    1,266       5,539
Litigation                          1,279    --         1,279
                                                        
Total operating expenses            $19,079 $2,289     $16,790
                                                        
Income from operations              $6,203  $(2,482)   $8,685
Operating margin %                  14.2%     -5.7%        19.9%
                                                        
Net income                          $6,014  $(2,482)   $8,496
Diluted net income per share        $0.22   $(0.10)    $0.32




VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

                                           June 30,   March 31,  December 31,
                                           2013       2013       2012
Assets                                                          
Current assets:                                                 
Cash, cash equivalents and short-term       $ 154,988 $ 152,382 $ 150,364
investments
Accounts receivable, net                    21,944    21,578    24,487
Inventories                                 21,213    18,055    18,719
Prepaid expenses and other current assets   2,239     2,828     3,103
                                                               
Total current assets                        200,384   194,843   196,673
Property and equipment, net                 11,520    11,382    11,013
Indefinite-lived intangibles                3,100     3,100     3,100
Goodwill                                    2,486     2,486     2,486
Other assets                                510       509       535
                                                               
Total assets                                $ 218,000 $ 212,320 $ 213,807
                                                               
Liabilities and Stockholders' Equity                            
Current liabilities:                                            
Accounts payable                            $9,054   $5,793   $7,073
Accrued liabilities                         9,894     9,266     13,974
                                                               
Total current liabilities                   18,948    15,059    21,047
                                                               
Other long-term liabilities                 3,599     3,508     3,561
                                                               
Total liabilities                           22,547    18,567    24,608
Stockholders' equity:                                           
Common stock                                29        29        29
Additional paid-in capital                  182,126   177,449   174,056
Retained earnings                           69,829    69,089    66,053
Treasury stock                              (56,531)  (52,814)  (50,939)
                                                               
Total stockholders' equity                  195,453   193,753   189,199
                                                               
Total liabilities and stockholders' equity  $ 218,000 $ 212,320 $ 213,807




VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL AND OTHER INFORMATION
(In thousands)
(Unaudited)
                                                              
                                                              
                                          Q2 2013    Q1 2013    Q4 2012
Selected Cash Flow Information:                                
Depreciation                               $947     $922     $934
Capital spending                           $(1,527) $(966)   $(1,702)
Cash paid for acquisitions                 $--     $(3,861) $(639)
Stock repurchase program                   $(3,717) $(1,875) $(2,054)
Proceeds from sales of shares to employees $2,209   $695     $1,334
                                                              
Stock Buyback:                                                 
Shares repurchased                         272       129       94
Cumulative shares repurchased              5,274     5,002     4,873

CONTACT: For investor information contact:
         Heidi Flannery, Investor Relations
         (510) 743-1718
         investor@volterra.com
 
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